UC self employed expenses - missed out expenses

seatbeltnoob

Hello.

I have a bounceback loan of £6000. With repayments of around £110 per month plus interest.

I never took out a loan before so I wasn't really aware how capital and interest are formed. I since discovered that capital repayment is fixed every month as per the loan agreement and the surplus in the payment is the interest which changes every month (reduces) so the total DD goes down each month.

ANyway, I wasn't aware of how much the interest was so I wasn't able to claim it as the expense. 3 months in and now realise the breakdown and can work out exactly how much interest was paid on the debt.

Now, what I want to know is do I have to ask UC to amend previous self employment reports or can I simply add last 3 months of interest paid into this months self employment income & expenses report?

The interest is £12.38, £11.90, £11.88 for April, May, June respectively.

seatbeltnoob

I am hesitant to ask them because there was an amendment I made a few months ago, and they ended up giving me more money that I was entitled to and then asking for 3x more back as an overpayment which I had to dispute and fix. All for a small amendment.

So I am very reluctant to askvthem to amend April & May payments. I would much rather just put all these interest payment through July as a "catch up" expense.

NedS

UC are unable to amend anything - the system calculates your award based on the information you report so it is your responsibility to report your income and expenses accurately and on time.

To have these interest payments taken into account as expenses, you would have to ask them to allow you to report your income and expenses again for the periods in question. They may allow you to do this, or not - the onus is on you to report your income and expenses accurately and on time each month.

Alternatively, write off those 3 months in the knowledge you will claim the interest going forward.

You cannot report those 3 months expenses in your next July income and expenses, as you did not incur those expenses in that month - you must report them in the month in which they were incurred.

seatbeltnoob

Hi NedS.

I knew I was paying interest, and I'm entiteled to claim the interest on a business loan as an expense. I phoned up barclays several times to enquire how much is the interest. Because all I get is a sum taken from my DD and not breakdown of what is capital and what is interest.

i chased them up and nobody could give me an answer, its onlyu 3 months of payments made and with the total outstand loan balance after 3 months that i was able to deduce what is the interest and what is the capital i was paying up til now. 

I will just take the hit for the first 2 payments, the 3rd ones falls in the period ending july 12th so I can still claim that.

calcotti

Note that the maximum amount you can claim is £41/month for interest on all combined business loans, accounting, legal, insurance and bank charges.
https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/how-to-report-your-earnings-from-self-employment#business-income-and-allowed-expenses
(Quite mean in my opinion.)

seatbeltnoob

Thanks calcotti. 

I wasn't paying any interest when I took out UC so I glossed over it at the time. I am a little confused by this. is it saying there is a limit of £41 pcm for the interest on all loans, accounting, legal, insurance and bank charges.

Or maximum of £41 for all interest, all accounting fees, all legal fees, all insurance costs, all bank charges.

My accounting, insurance are paid in lump sum. Here are the annual costs

Accountant £150p.a. (paid lump sum on invoice)

Public liability/product liability insurance £100p.a (paid lump sum).

Monthly fee for business bank account £102 (Paid £8.50 monthly)

total bounce back loan interest £144 (paid monthly of £11-£12 a month).

Incidently if I add it all up and then divide it by 12, it comes to £41.33 per month.

calcotti

seatbeltnoob said:

..this. is it saying there is a limit of £41 pcm for the interest on all loans, accounting, legal, insurance and bank charges.

Or maximum of £41 for all interest, all accounting fees, all legal fees, all insurance costs, all bank charges.

It reads like the latter but I don't know and if that is the case is very miserly. Hopefully somebody else may be able to advise.

seatbeltnoob

The latter is just too impractical. Here's a printout of a handbook. The emboldending makes all the difference.

When it's embolden like that it seems it's £41 pcm on just all the loan interest.

The wording is a bit imprecise there. If they rejigged the list of financing costs and put the bank interest at the end of the list, it would be clear.

seatbeltnoob

Phew.. page 49 here, makes it clear that £41 is for the interest alone: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1079323/admh4.pdf

calcotti

Good spot - I forgot to look there earlier. That's clear. The other document is ambiguous.